India. Egg Demand May Return as Prices Ease 24%

Poultry farmers and traders see an uptick in demand for eggs as prices have eased, saying an increase in demand will check a further dip in prices while encouraging more production.

According to The Economic Times, they said that the upcoming Christmas and New Year celebrations will also boost demand.

Egg prices, which soared to an all-time high of Rs 5.50 a piece last week, have since fallen more than 24 per cent. The farm gate price at present is between Rs 4.15 and Rs 4.50 a piece, while retail prices are between Rs 6 and Rs 7 in the northern states and Rs 5 and Rs 6 in the south.

"Consumption slipped as the prices increased to very high levels. The production has not increased much this year," said Ramesh Khatri, president of Poultry Federation of India.

As the prices have dipped from the peak levels, the consumption is expected to improve, which in turn could spur the production.

"The winter and Christmas and New Year demand is expected to cap any further fall in egg prices. It could stabilise around Rs 4 a piece," said P V Senthil, secretary of Livestock and Agri Farmers Trade Associations.

India produces around 25 crore eggs a day, bulk of which comes from the southern states. Namakkal in Tamil Nadu, considered the hub of egg trade, now produces 3 crore eggs a day as against 3.3 crore eggs a day earlier.

"Last year, there was a heavy dip in profit for the poultry farmers prompting them to cut production. They did not replace the layer birds that were removed last year.

"This year, they have been making some profit after a long time," said P Selvaraj, chairman of Namakkal National Egg Co-ordination Committee.

Production cost of an egg is estimated to be around Rs 3.50 at the farm gate level. Farmers had been earning below that until a few months ago.

"The current prices will lift the production to earlier level of 3.3 crore eggs daily," said Mr Selvaraj.

Another factor that can help keep prices at a profitable level for the farmers is the resumption in exports albeit slowly.

"We used to export around 3 crore eggs a month. It is now down to around 40 to 50 lakh eggs but is gradually picking up," Mr Senthil said.

The incidences of bird flu and the cut in production had hit egg exports. Oman is the principal buyer of Indian eggs followed by other Gulf countries like Qatar.

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